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IndustryNet Blog

A closer look at Wisconsin's manufacturing boom

Posted by IndustryNet on Friday, October 13, 2017

100000122WisconsinOpenForBusinessAccording to new data released today by MNI, compiler and publisher of the industrial information that powers IndustryNet, Wisconsin manufacturing continues to thrive, with the sector adding jobs for a sixth straight year.

This post will take a look at some major Wisconsin manufacturing industries and how they’ve fared this survey period, and will delve into city, county and regional data. We’ll also examine some of the major announcements made over the past six years, and explore exactly what’s driving Wisconsin manufacturing forward.

Gains widely distributed across industries, regions

MNI reports Wisconsin manufacturers added 2,495 new net jobs between August 2016 and August 2017, representing a half percent gain.

Job gains over the past year were spread across multiple sectors, a reflection of Wisconsin’s diverse economy. The electronics industry led the way, reporting a 4% increase in jobs. Industries as varied as fabricated metals, transportation equipment, medical instruments, rubber/plastics; and lumber all added jobs.

Regionally, employment increases were also widely distributed, with most of the state’s five regions posting gains. Employment jumped 6.4% in East Central Wisconsin, rose 2.2% in the Southwest, and inched up a half percent in Northern Wisconsin. Employment in the Southeast held steady, edging up by 500 jobs.

The state’s West Central region was the only to lose jobs – but not by much, down a third of a percent over the year.

Taking a look at cities, job inched down another half percent in Milwaukee, and plummeted 10% in Madison after the closure of Oscar Mayer’s hot dog plant. However, solid gains reported in Appleton; Menomonee Falls; Neenah; New Berlin; and Fond Du Lac, were more than enough to make up for losses in the state’s two largest cities.

All great news. Let’s take a look at exactly how far the state has come.

Wisconsin’s slow rise to manufacturing superstardom

The Badger State was hit hard during the recession, shedding more than 60,000 manufacturing jobs during the downturn, according to MNI data. Prior to that, Wisconsin already losing jobs in response to multiple factors, including automation and a sharp increase in global competition largely attributed to NAFTA.

Since then, Wisconsin has made a remarkable comeback, adding 23,000 jobs since August of 2011, an increase of 4.2%.

Here’s a look back at some of the major highlights for the state’s manufacturing sector over the years.WisconsinManufacturingTenYearGrowth

This was the first year MNI reported an increase in the state’s manufacturing employment following the precipitous losses of the recession. Over the year we saw the opening of Thomas Magnete LLC’s factory in Brookfield, which manufactures solenoids and control valves for vehicles.

Mercury Marine expanded its facility in Fond Du Lac; Wacker Neuson expanded its construction equipment plant in Menomonee Falls; and Genencor International announced an expansion of their industrial enzyme facility in Beloit.

Multiple expansions were reported over this survey period. Printpack, Inc. announced it would expand its Rhinelander, and additional expansions were announced at LDV Inc. in Burlington; Jensen Metal Products in Racine; Polaris Industries in Osceola; Winsert, Inc. in Marinette; Racine Metal-Fab in Sturtevant; and United Alloy in Janesville. Plexus Corp. unveiled plans to establish a factory in Neenah.

This was a big year for the state’s food products industry, which posted a 3% rise in employment, helped by the expansion of Shreiber Foods’ yogurt plant in Richland Center. Major announcements for the industry included Thiel Cheese and Ingredients’ plans to partner with the Irish Dairy Board to break ground on a $12 million expansion in Hilbert.

Other bright spots that year included Kenall Manufacturing’s plans to move its headquarters from Gurnee, Illinois to a new facility in Kenosha. L&M Corrugated Container Corp. opened a new plant in Pleasant Prairie; paper manufacturer Summer Industries established a new facility in Neenah; Kendall Packaging expanded its factory in Mequon; and Wisconsin Oven established a new location in East Troy.

The expansions kept coming over the year and included Sargento Foods in Elkhart Lake; Baker Cheese Factory in St. Cloud; Allcast LLC in Addison; XTreme Stainless in Germantown; and Illumina in Madison. In addition, OEM Industries opened a new manufacturing facility in Pleasant Prairie, and plastic sheeting maker GOEX Corp broke ground on a new plant in Janesville.

Several major plant openings were announced over this survey period, including Hobart Welding Products, which shuttered its Troy, Ohio plant and moved production to Appleton. Beverage International announced plans to establish a bottling plant in Two Rivers; and the Little Potato Company unveiled plans to establish a new processing facility in DeForest. In addition, Johnsonville Sausage completed work on its $36 million production facility in Watertown.

This was Wisconsin’s big year for major manufacturing announcements, headlined by Taiwanese company Foxconn’s plans to open a massive 20 million square-foot LCD panel factory outside of Kenosha. The Foxconn project will bring an estimated 13,000 jobs to the area (not to mention 22,000 indirect jobs), promising an average annual wage of $53,875. The proposed Foxconn plant is billed as the largest economic development investment in the state’s history, and one of the largest in U.S. history.

Foxconn had been planning on a U.S. location for several months prior to the announcement, setting off seven-state bidding war of a magnitude not seen since multiple states contended for Tesla’s gigafactory back in 2014. In the end, Wisconsin won out, due to a number of site selection factors, as well as a contentious $3 billion incentive program.

Some remain skeptical, especially those in Pennsylvania who remember Foxconn’s plans to build a massive factory in that state back in 2013. Those plans have since gone nowhere. Others say it will take 25 years for Wisconsin to break even from the massive tax breaks and cash incentives offered to the electronics giant.

Foxconn was not the only major announcement over the year. German candy company Haribo announced plans to open a gummy bear factory in Pleasant Prairie, purported to be one of the largest foreign investments in the state. This is Haribo’s first North American plant, and will employ 400 once operational in 2020.HariboGummyBears

Additionally, Signature Wafers LLC took over the old “Rippin’ Good Cookies” space, resuming cookie production in the town of Ripon after a year’s lapse, and Pratt Industries opened a new cardboard box factory in Beloit.

So what’s driving all the investment in Wisconsin’s manufacturing sector?

Wisconsin's winning mix of site-selection factors

Wisconsin gets high marks for a number of site selection factors, most notably its highly skilled workforce and top notch educational facilities. Its tax climate is one among the most business-friendly in the nation.

The state’s manufacturing and agriculture credit is a unique incentive that allows manufacturers to effectively eliminate income taxes on manufacturing activity. There is also a business development tax credit available to new job-creators coming into the state. In addition, comprehensive training grants ensure the availability of workers with the skills for today’s advanced manufacturing.

In addition to its favorable business climate and availability of skilled labor, the state also scores big for a strong focus on technology and innovation. Recent efforts to further grow the state’s manufacturing sector include the Transformational Productivity Initiative (TPI), a joint effort between the The Wisconsin Economic Development Association (WEDA) and the Wisconsin Manufacturing Extension Partnership, aimed at increasing productivity and helping to boost the state’s global competitiveness.

Wisconsin also became the 25th right-to-work state back in 2015 when Governor Scott Walker signed the bill that barred mandatory union dues at private businesses. The new legislation was touted as essential for the state’s competitiveness and stands to serve as a major selling point for business looking to locate in Wisconsin.

But, as with all right to work bills, concerns persist that the law will put downward pressure on wages, and since then legislation has faced numerous challenges, including a ruling by a county judge in 2016 challenging the law’s constitutionality.That ruling was struck down last month by the 3rd District Court of Appeals. It remains to be seen if Wisconsin, traditionally a state of strong union participation and by many accounts the birthplace of the labor movement, will continue to see challenges to its right-to-work status.

By the Numbers

Wisconsin’s 10,373 industrial companies employ 574,224 workers.

Here’s a further breakdown of the numbers:chicken processing

Leading Wisconsin Industries by Employment:

18% Industrial machinery and equipment
13% Food and kindred products
12% Fabricated metal products
8% Rubber and miscellaneous plastic products
7% Electronic and other electric equipment

Largest Wisconsin Manufacturers by Employees:

Kohler Co. (Kohler) - 7,300
Lands' End, Inc. (Dodgeville) - 4,000
Greenheck Fan Corp. (Schofield) - 3,800
Ashley Furniture Industries, Inc. (Arcadia) - 3,500
Mercury Marine (Fond du Lac) - 3,100

Wisconsin Counties with the Most Industrial Jobs:

Milwaukee - 80,336
Waukesha - 63,526
Dane - 40,066
Brown - 34,566
Sheboygan - 26,695

Wisconsin Cities with the Most Manufacturing Jobs:

Milwaukee - 51,863
Green Bay - 25,508
Madison - 19,235
Waukesha - 17,298
Appleton - 13,470

For more information on Wisconsin manufacturers

MNI’s extensive manufacturing data powers IndustryNet, an industrial marketplace that connects buyers with suppliers. IndustryNet allows users to search and source more than ten thousand types of products, parts, supplies, and services for free. IndustryNet® lists every U.S. manufacturer plus thousands of wholesalers & distributors and industrial service providers.

To connect with industrial suppliers in Wisconsin and across the U.S. start your free search on IndustryNet. Or, to access detailed profiles of Wisconsin’s 10,000 industrial companies and their 35,000 executives, learn more about MNI’s database subscription

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